Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (June 2016)
54 slides from Nextera Energy's investor presentation, June 2016
Slide 1: June 2016 Investor Presentation
June 2016 Investor Presentation
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward- looking statements. The factors that could cause actual results to
Slide 3: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 9 • NextEra Energy Resources Slide 17 • NextEra Energy Partners, LP (NYSE: NEP) Slide 27 • Financial Review Slide 37 • Appendix Slide 40 3
Slide 4: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy is comprised of two strong businesses supported by a common platform • $55.4 B market capitalization(1) • 45 GW in operation(2) • $85 B in total assets • Strategic partnership with • One of the largest electric • The leader in North America utilities in the nation by in electricity ge
Slide 5: Built on a foundation of best-in-class operational excellence and financial strength
Built on a foundation of best-in-class operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2014 Utility & Corporate Benchmarks 2015 NextEra Energy Fuel Mix MWhs(4) Good Industry 7.4% Nuclear Wind Good 25% 17% Industry ~$24 FL Avg ~97
Slide 6: We have a long-term track record of delivering value to shareholders
We have a long-term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) $5.71 2% 1.4% 70% 65% $5.30 $4.97 0.7% 1% 60% $4.30 $4.39 $4.57 53% $3.84 $4.05 0% 50% $3.49 (1%) 39% $3.04 40% $2.63 (2%) 30% (3%) (4%) 20% (5%) 10% (4.8%) (6%) 0% One Yea
Slide 7: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 5/31/2016 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $55,429 NextEra Energy 2 $38,185 2 $54,916 3 $34,476 3 $53,8
Slide 8: NEP forms an excellent complement to NextEra Energy
NEP forms an excellent complement to NextEra Energy NextEra Energy: Partnership with NEP • Best-in-class yieldco vehicle through – Strong sponsor with proven development track record – Extensive potential drop down visibility – Well-aligned incentives, using proven MLP-like structure with IDRs • Hig
Slide 9: 9
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Slide 10: Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light is one of the best utility franchises in the U.S. Florida Power & Light • One of the largest U.S. electric utilities • Vertically integrated, retail rate-regulated • 4.8 MM customer accounts • 26.5 GW in operation(1) • $11.7 B in(2)operating revenues • $43 B in total assets (1)
Slide 11: Our core focus at FPL has been consistent for many years
Our core focus at FPL has been consistent for many years Areas of Focus • Unyielding commitment to Superior Customer Value Delivery customer value proposition • Focus on efficiency and Strong Financial Virtuous Circle Customer best-in-class cost Position Satisfaction performance Constructive • One o
Slide 12: Florida's economic growth remains solid
Florida’s economic growth remains solid Florida Economy Florida Unemployment(1) Florida Consumer Sentiment(2) 12% 100 90 10% 80 May-16 8% 70 60 6% 50 40 4% 30 2% 20 10 0% 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 F
Slide 13: Our value delivery is founded on a low cost position and best-in-class operations
Our value delivery is founded on a low cost position and best- in-class operations Operational Cost Effectiveness(1) $100.00 Good Adjusted Regressed Top Decile $/Retail MWh FPL ~$15 Log/Log $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2014. Excludes pensions and
Slide 14: FPL's typical residential bills below Florida and national averages
FPL’s strategy continues to result in typical residential bills below both Florida and national averages FPL Customer Bill(1) ~$132 ~$122 ~$108 ~$92 Medical Home FPL bill Care Food Insurance down up 38% up 28% up 28% 15% FPL FPL Florida National Change vs. 2006 (6) 2006 (2) 2016 (3) Avg (4) Avg(5) (
Slide 15: We have a number of opportunities ahead of us
We have a number of opportunities ahead of us FPL Overview of Opportunities • We are laser focused on the underpinnings of our successful strategy: – Efficiently deploying incremental capital and focusing on O&M savings – Investments that benefit both investors and customers – Continue to enhance th
Slide 16: FPL submitted its formal base rate filing on March 15th
FPL submitted its formal base rate filing on March 15th Estimated FPL Rate Case Timeline March 15, July/ August/ January 2016 June August September Q4 2017 File formal Quality Intervenor, Technical Final New rate request of staff, and hearings decision rates (testimony; service FPL by PSC effective
Slide 17: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 18: Energy Resources is a diversified clean energy company
Energy Resources is a diversified clean energy company whose skills and assets are well aligned to drive growth Energy Resources Skills and Capabilities Generation Portfolio(1) • Largest, most successful developer of renewables in North America – Consistent strategy to build, own and operate environ
Slide 19: Energy Resources' growth is driven by its best-in-class development skills
Energy Resources’ growth is driven by its best-in-class development skills Growth in New Businesses Wind and Solar Portfolio(1) 18,000 Customer Wind Relationships Engineering/ Regulatory 12,000 Solar Construction MW Management 6,000 0 Best-In-Class Integrated 2002 2004 2006 2008 2010 2012 2014 2016
Slide 20: Energy Resources' renewables development program is well positioned
Energy Resources’ renewables development program is well positioned for continued success Energy Resources Renewables Development(1) • 2015 – 2016 renewables development program of over 4 GW – Most successful two year period for renewables development in our history • Expected potential in 2017 – 20
Slide 21: Energy Resources' renewables development opportunities have never been stronger
Energy Resources’ renewables development opportunities have never been stronger Drivers for New Renewables • Certainty of U.S. Federal Tax incentives for renewables • Improvements in wind and solar technology and declining cost trends • State regulatory programs to encourage development of renewable
Slide 22: U.S. Federal tax incentives for renewables extended into the next decade
U.S. Federal tax incentives for completed renewables projects have been extended into the next decade Extended U.S Federal Tax Credits Wind Production Solar Investment Tax Credit (PTC) Tax Credit (ITC) Start of Start of Construction COD Wind Construction Solar Date Deadline PTC Date ITC(1) During 20
Slide 23: Turbine price reductions and efficiency improvements reduced delivered cost of wind
Turbine price reductions and efficiency improvements due to blade length and tower heights have reduced the average delivered cost of new wind Wind Technology Levelized Cost of Net Capacity Factor(1) Electricity from Wind(2) 60% $70 55% $60 $55- 50% $65 $50 45% $/MWh $40 40% $36- $42 $30 $30- 35% $3
Slide 24: Solar installation costs are declining and efficiency is improving
Solar installation costs are declining and efficiency is improving Solar Technology PV Module Efficiency Levelized Cost of and Delivered Cost(1) Electricity from Solar(2) 19.0% Efficiency Cost $0.80 $160 $0.71 18.0% $0.62 $0.65 $120 17.0% $0.54 16.7% $/Wdc $/MWh 16.0% 16.5% $146 16.2% $0.50 $80 16.0
Slide 25: Battery storage has the potential to be a game-changer
While still in its infancy, battery storage has the potential to be a game-changer for the renewable energy industry Storage Technology • Storage is a natural extension of Lithium Ion Battery our development business and Cost Curve and complements the balance of our Production(1) portfolio $1,200 60
Slide 26: Expanding into the gas pipeline business
We have leveraged our skills and capabilities from gas infrastructure activities to expand into the gas pipeline business Gas Pipeline Assets Sabal Trail and Florida Mountain Valley Pipeline Texas Pipelines(1) Southeast Connection • Energy Resources expects • Energy Resources expects • NEP completed
Slide 27: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 28: NextEra Energy Partners is focused on investing in clean energy assets with stable cash flows
NextEra Energy Partners (NEP) is focused on investing in clean energy assets with stable cash flows NEP Overview • NEP is a growth-oriented partnership formed by NextEra Energy, Inc. (NEE) to: – Acquire contracted clean energy projects with stable, long-term cash flows from NEE and the market – Take
Slide 29: NEP is the premier company in the yieldco space
We believe NEP is the premier company in the yieldco space and we are focused on sustaining this position Characteristics of a Great Yieldco NEP • Strong sponsor • Operational excellence • High quality projects • High-profile drop-down visibility • Well-aligned incentives 29
Slide 30: NEP benefits from substantial sponsor strength
NEP benefits from substantial sponsor strength Sponsor Strength • Energy Resources is largest generator in the world of renewable energy from the wind and sun • ~16 GW of renewables in operation by the end of 2016(1) • Over 21 GW of all fuel technologies in operation(1) • Assets primarily in 25 stat
Slide 31: NEP has diversified its high-quality asset base
NEP has diversified its high-quality asset base while maintaining the long contract life, minimal commodity risk, and largely investment-grade counterparty mix of its portfolio NEP Portfolio Characteristics Renewables Capacity(1) Average Contract Life(2) 2,371 MW 21 Years 19 Years 990 MW IPO 3/31/20
Slide 32: LP distributions have grown significantly since IPO
LP distributions have grown significantly since IPO LP Distributions Growth Since IPO(1) $1.50 $1.275 $1.25 $1.23 $1.08 $1.00 $0.94 $0.82 $0.75 $0.78 $0.75 $0.50 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 32 (1) Annualized basis; refer to distributions payable on the NextEra Energy Part
Slide 33: The NEP portfolio is diversified by geography and asset mix
The NEP portfolio is diversified by geography and asset mix The NEP Portfolio(1) 33 (1) As of March 31, 2016
Slide 34: NEP Organizational Structure
NEP is a growth-oriented limited partnership formed by NextEra Energy (NEE) NEP Organizational Structure ~100% • 1 Public unitholders own ~100% of Economic Interest in economics in NextEra Energy NEP NEE Partners via LP interest ~71% Public Investors Economic Interest in • Public unitholders hold an
Slide 35: NEP to grow LP distributions by 12-15% annually through 2020
After the acceleration of growth in 2015, our current expectations are for NEP to grow LP distributions by 12-15% annually through 2020 NEP LP Distributions Long-Term Growth Outlook(1) $2.17-$2.47 $2.50 $2.00 $1.50 $1.38-$1.41 $1.23 $1.00 $0.50 $0.00 2015 2016 2017 2018 2019 2020 12% Growth 15% Grow
Slide 36: NEP Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1,2) Adjusted EBITDA CAFD 12/31/16 Run Rate(3) $640 - $760 MM $210 - $290 MM Unit Distributions 2016 $1.38 - $1.41 annualized rate by year end(4) 2016 - 2020 12% - 15% average annual growth(5) (1) See Appendix for definition of Adjusted
Slide 37: Financial Review
NEXT@ra ANANCIAL REVIEW
Slide 38: NextEra Energy's Adjusted Earnings Per Share Expectations
NextEra Energy’s Adjusted Earnings Per Share Expectations(1) 2016 $5.85 - $6.35 $6.60 - $7.10 2018 (6% - 8% CAGR off a 2014 base) (1) See Appendix for definition of Adjusted Earnings expectations 38
Slide 39: NextEra Energy announced a new dividend policy
NextEra Energy announced a new dividend policy on the second quarter 2015 earnings call NextEra Energy Dividend Expectations Dividend Per Share Growth Dividend Policy • Targeting increased rate of dividend growth $4.30 - $4.60 • Dividend payout ratio expected to increase to 65% by 2018 $3.08 • Expec
Slide 40: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 40
Slide 41: NextEra Energy Resources
NEX Tera ENERGY &
Slide 42: Contracted Renewables Development Program
Contracted Renewables Development Program(1,2) Wind Location MW COD Solar Location MW COD Breckenridge OK 98 2015 Shafter CA 20 2015 Goshen Ontario 102 2015 Adelanto I & II CA 27 2015 East Durham Ontario 22 2015 McCoy Solar(3) CA 250 2016 Cedar Point JV Ontario 50 2015 Blythe(3) CA 110 2016 Golden H
Slide 43: Reconciliation of Earnings Per Share to Adjusted Earnings Per Share
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 2.34 $ 3.23 $ 3.27 $ 4.07 $ 3.97 $ 4.74 $ 4.59 $ 4.56 $ 4.47 $
Slide 44: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the unrealized mark-to-market effect of non-qualifying hedges, net OTTI losses on securities held in NextEra Energ
Slide 45: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, bu
Slide 46: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ab
Slide 47: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 48: HoldCo Debt Capacity
HoldCo Debt Capacity (March 31, 2016) $975-$1,075 $675 $ MM $300-$400 $30-$35 (3) $15-$25 $280-$310 ~3.5x $210-$240 $10-$20 Estimated Corporate IDR Fees(2) HoldCo Cash Project HoldCo HoldCo Remaining (2) (2) Pre-tax Expenses Interest Available Level to Debt Debt HoldCo (1,2) (4) (4) CAFD Pre-tax Ser
Slide 49: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2016 Run Rate CAFD) $720-$840(2) ($10-$20) ($40-$60) $640-$760 ($240-$260)(3) ($155-$205)(4) $ MM ($20-$25)(5) ($5-$10) $210-$290(6) Project-level Corporate IDR Adjusted Debt Service Pre-tax Non-cash Maintenance Estimated Adjusted Expenses Fe
Slide 50: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. NEP’s adjusted EBITDA expectations represent projected revenue less fuel expense, project operating expenses, corporate G&A, plus other incom
Slide 51: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 52: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) which could have material adverse effect on NEP's business, financial condition, results of operations and ability to make cash distributions to its unitholders; NEP may incur significant costs and liabilities as a result o
Slide 53: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) infrequent and often competitive procurement windows; NEP may continue to acquire other sources of clean energy, including, without limitation, natural gas and nuclear projects, and may expand to include other types of asse
Slide 54: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) If NEP incurs material tax liabilities, NEP's distributions to its unitholders may be reduced, without any corresponding reduction in the amount of the IDR fee; Holders of NEP's common units have limited voting rights and a